What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-05-04 compared with 2022-11-03 · 66 added, 105 removed, 213 unchanged (45% of the section changed)

2 unchanged sentences

Unless otherwise indicated, references in this report to "we," "our," "us" or like terms, refer to Westlake Chemical Partners LP (the "Partnership"), Westlake Chemical OpCo LP ("OpCo") and Westlake Chemical OpCo GP LLC ("OpCo GP").

References to "Westlake" refer to Westlake Corporation (formerly known as Westlake Chemical Corporation) and its consolidated subsidiaries other than the Partnership, OpCo GP and OpCo.

References to "Westlake" refer to Westlake Corporation and its consolidated subsidiaries other than the Partnership, OpCo GP and OpCo.

The following discussion contains forward-looking statements.

58 unchanged sentences

Reconciliations for each of MLP distributable cash flow and EBITDA are included in the "Results of Operations" section below.

Recent Developments

On July 12, 2022, OpCo entered into the Second Amendment (the "OpCo Revolver Amendment") to the Amended and Restated Senior Unsecured Revolving Credit Agreement (as so amended, the "OpCo Revolver").

The OpCo Revolver Amendment, among other things, extended the maturity date of the OpCo Revolver to July 12, 2027 and provided for the replacement of the London Interbank Offered Rate ("LIBOR") with the Secured Overnight Financing Rate, as administered by the Federal Reserve Bank of New York ("SOFR").

Borrowings under the OpCo Revolver now bear interest at a variable rate of either (a) SOFR plus the Applicable Margin plus a 0.10% credit spread adjustment or, if SOFR is no longer available, (b) the Alternate Base Rate plus the Applicable Margin minus 1.0%.

The Applicable Margin under the OpCo Revolver is 1.75%.

On July 12, 2022, the Partnership entered into the Fourth Amendment (the "MLP Revolver Amendment") to the Senior Unsecured Revolving Credit Agreement (the "MLP Revolver").

The MLP Revolver Amendment, among other things, extended the maturity date of the MLP Revolver to July 12, 2027 and provided for the replacement of LIBOR with SOFR.

Borrowings under the MLP Revolver now bear interest at a variable rate of either (a) SOFR plus the Applicable Margin plus a 0.10% credit spread adjustment or, if SOFR is no longer available, (b) the Alternate Base Rate plus the Applicable Margin minus 1.0%.

The Applicable Margin under the MLP Revolver varies between 1.75% and 2.75%, depending on the Partnership's Consolidated Leverage Ratio.

Results of Operations

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

(dollars in thousands)

8 unchanged sentences

Interest expense—Westlake (7,315) (2,199)

Other income, net 618 24 683 52

Other income (expense), net 820 (25)

Income before income taxes 91,664 80,988

Income tax provision (benefit) 484 (105) 822 333

Provision for income taxes 212 163

Net income 91,452 80,825

8 unchanged sentences

(2) See "Reconciliation of EBITDA to Net Income, Income from Operations and Net Cash Provided by Operating Activities" below.

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022

Sales Price Volume Average

Three Months Ended March 31, 2023

Sales Price Volume

Product sales prices and volume percentage change from prior-year period

+24.5 % +13.4 % +28.4 % +12.1 %

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022

Net sales percentage change from prior-year period due to average sales price and volume -18.4 % +3.3 %

Three Months Ended March 31, 2023

Domestic US prices percentage change from prior-year period for fuel cost and feedstock

3 unchanged sentences

The following table presents reconciliations of MLP distributable cash flow to net income and net cash provided by operating activities, the most directly comparable GAAP financial measures, for each of the periods indicated.

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

(dollars in thousands)

11 unchanged sentences

The following table presents reconciliations of EBITDA to net income, income from operations and net cash provided by operating activities, the most directly comparable GAAP financial measures, for each of the periods indicated.

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Three Months Ended March 31,

(dollars in thousands)

3 unchanged sentences

Net income 91,452 80,825

Other income, net 618 24 683 52

Interest expense (3,645) (2,190) (8,703) (6,650)

Income tax benefit (provision) (484) 105 (822) (333)

Other income (expense), net 820 (25)

Interest expense—Westlake (7,315) (2,199)

Provision for income taxes (212) (163)

Income from operations 98,159 83,212

Depreciation and amortization 26,636 31,282

Other income, net 618 24 683 52

Other income (expense), net 820 (25)

EBITDA $ 125,615 $ 114,469

For the quarter ended September 30, 2022, net income was $78.3 million on net sales of $415.1 million.

This represents an increase in net income of $12.2 million as compared to net income of $66.1 million on net sales of $294.0 million for the quarter ended September 30, 2021.

Net income attributable to the Partnership for the third quarter of 2022 was $14.8 million as compared to $12.8 million for the third quarter of 2021, an increase of $2.0 million.

Income from operations was $81.8 million for the third quarter of 2022 as compared to $68.1 million for the third quarter of 2021.

Net income, net income attributable to the Partnership and operating income for the third quarter of 2022 as compared to the third quarter of 2021 were higher primarily due to higher ethylene sales prices and volumes to Westlake per the terms of the Ethylene Sales Agreement, higher co-products sales prices and volumes, and a buyer deficiency fee of $13.9 million recognized during the third quarter of 2022 resulting from lower planned ethylene offtake by Westlake, partially offset by higher ethane feedstock costs and natural gas prices.

Net sales for the third quarter of 2022 increased by $121.1 million as compared to net sales for the third quarter of 2021, mainly due to higher production during the third quarter of 2022 following the Petro 2 turnaround activities that occurred in the third quarter of 2021, resulting in higher sales volumes for co-products and ethylene sold to Westlake, higher ethylene sales prices to Westlake, and the $13.9 million buyer deficiency fee recognized during the third quarter of 2022.

For the nine months ended September 30, 2022, net income was $243.6 million on net sales of $1,226.3 million.

This represents a decrease in net income of $19.4 million as compared to net income of $263.0 million on net sales of $884.4 million for the nine months ended September 30, 2021.

Net income attributable to the Partnership for the nine months ended September 30, 2022 was $47.4 million as compared to $53.0 million for the nine months ended September 30, 2021, a decrease of $5.6 million.

Income from operations was $252.4 million for the nine months ended September 30, 2022 as compared to $269.9 million for the nine months ended September 30, 2021.

Net income, net income attributable to the Partnership and operating income for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021 were lower primarily due to increased ethane feedstock costs and natural gas prices and lower ethylene sales prices and volumes to third parties, partially offset by higher ethylene sales prices and volumes to Westlake per the terms of the Ethylene Sales Agreement and higher co-products sales prices and volumes.

A buyer deficiency fee of $13.9 million was recognized in the nine months ended September 30, 2022 as compared to a buyer deficiency and Shortfall of $21.5 million in the nine months ended September 30, 2021.

Net sales for the nine months ended September 30, 2022 increased by $341.9 million as compared to net sales for the nine months ended September 30, 2021, mainly due to higher co-products sales prices and volumes and higher ethylene sales prices and volumes to Westlake per the terms of the Ethylene Sales Agreement, partially offset by lower ethylene sales prices and volumes to third parties and the larger buyer deficiency fee and Shortfall recognized during the nine months ended September 30, 2021 as compared to the buyer deficiency fee recognized during the nine months ended September 30, 2022.

For the quarter ended March 31, 2023, net income was $91.5 million on net sales of $307.7 million.

This represents an increase in net income of $10.7 million as compared to net income of $80.8 million on net sales of $362.4 million for the quarter ended March 31, 2022.

Net income attributable to the Partnership for the first quarter of 2023 was $14.9 million as compared to $16.2 million for the first quarter of 2022, a decrease of $1.3 million.

Income from operations was $98.2 million for the first quarter of 2023 as compared to $83.2 million for the first quarter of 2022.

Net income and operating income for the first quarter of 2023 as compared to the first quarter of 2022 were higher primarily due to lower ethane feedstock costs and natural gas prices as well as higher production resulting in higher ethylene sales volumes in the first quarter of 2023 compared to the first quarter of 2022, partially offset by lower ethylene and co-products sales prices.

Net income attributable to the Partnership for the first quarter of 2023 decreased as compared to the first quarter of 2022 due to higher interest expense attributable to the Partnership, partially offset by the higher income from operations as discussed above.

Net sales for the first quarter of 2023 decreased by $54.7 million as compared to net sales for the first quarter of 2022, mainly due to lower ethylene and co-products sales prices during the first quarter of 2023 as compared to the first quarter of 2022.

RESULTS OF OPERATIONS

Third Quarter 2022 Compared with Third Quarter 2021

Total net sales increased by $121.1 million, or 41.2%, to $415.1 million in the third quarter of 2022 from $294.0 million in the third quarter of 2021.

The increase in net sales in the third quarter of 2022 was primarily due to higher sales prices and volumes for ethylene sold to Westlake and co-products driven by increased production during the third quarter of 2022 compared to the third quarter of 2021 due to the Petro 2 turnaround activities that occurred in the third quarter of 2021 and the buyer deficiency fee recognized during the third quarter of 2022.

The average sales price in the third quarter of 2022 increased by 24.5%, primarily due to higher ethylene sales prices to Westlake and co-products sales prices.

The average sales volume in the third quarter of 2022 increased by 13.4%, primarily due to higher production resulting in increased sales volumes to Westlake and increased co-products sales volumes as compared to the third quarter of 2021.

Gross Profit.

Gross profit increased to $90.5 million in the third quarter of 2022 from $75.9 million in the third quarter of 2021.

The gross profit margin in the third quarter of 2022 was 21.8%, as compared to 25.8% for the third quarter of 2021.

The increase in gross profit was primarily due to higher ethylene sales prices and volumes sold to Westlake and higher co-products sales prices and volumes in the third quarter of 2022 compared to the third quarter of 2021, partially offset by higher ethane feedstock costs and natural gas prices.

The third quarter 2022 gross profit margin was lower than the third quarter of 2021 mainly due to higher ethane feedstock costs and natural gas prices, partially offset by higher sales prices and volumes for co-products and ethylene sold to Westlake in the third quarter of 2022.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased by $0.9 million, or 11.5%, to $8.7 million in the third quarter of 2022 as compared to $7.8 million in the third quarter of 2021.

The increase in the third quarter of 2022 was mainly attributable to an increase in the provision for doubtful accounts as compared to the third quarter of 2021.

Interest Expense.

Interest expense of $3.6 million in the third quarter of 2022 increased from $2.2 million in the third quarter 2021 due to a higher average interest rate on debt compared to the third quarter of 2021.

MLP Distributable Cash Flow.

MLP distributable cash flow increased by $3.7 million to $16.7 million in the third quarter of 2022 from $13.0 million in the third quarter of 2021.

The increase in the third quarter of 2022, as compared to the prior-year period, was primarily attributable to increased earnings at OpCo, as well as decreased turnaround reserves and maintenance expense.

EBITDA increased by $17.1 million to $111.8 million in the third quarter of 2022 from $94.7 million in the third quarter of 2021.

The increase was primarily due to higher ethylene sales prices and volumes sold to Westlake, higher co-products sales prices and volumes and the buyer deficiency fee recognized during the third quarter of 2022, partially offset by higher ethane feedstock costs and natural gas prices.

Nine Months Ended September 30, 2022 Compared with Nine Months Ended September 30, 2021

Total net sales increased by $341.9 million, or 38.7%, to $1,226.3 million in the nine months ended September 30, 2022 from $884.4 million in the nine months ended September 30, 2021.

The increase in net sales in the nine months ended September 30, 2022 was primarily due to higher co-products sales prices and volumes and higher ethylene sales prices and volumes to Westlake, partially offset by lower ethylene sales prices and volumes to third parties.

In addition, the buyer deficiency fee of $13.9 million during the nine months ended September 30, 2022 was lower than the buyer deficiency fee and Shortfall of $21.5 million recognized during the nine months ended September 30, 2021.

The average sales price in the nine months ended September 30, 2022 increased by 28.4% compared to the nine months ended September 30, 2021, primarily due to higher co-products and ethylene sales prices to Westlake, partially offset by lower ethylene sales prices to third parties.

The average sales volume increased by 12.1% in the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021.

The increase in sales volumes for the nine months ended September 30, 2022 was primarily due to higher production resulting in increased co-products and ethylene sales volumes to Westlake, partially offset by lower ethylene sales volumes to third parties.

First Quarter 2023 Compared with First Quarter 2022

Total net sales decreased by $54.7 million, or 15.1%, to $307.7 million in the first quarter of 2023 from $362.4 million in the first quarter of 2022.

The decrease in net sales in the first quarter of 2023 was primarily due to lower ethylene and co-products sales prices, partially offset by higher production resulting in an increase in ethylene sales volumes during the first quarter of 2023 as compared to the first quarter of 2022.

The lower average sales prices in the first quarter of 2023 contributed to an 18.4% decrease in net sales compared to the first quarter of 2022.

The higher sales volumes in the first quarter of 2023 contributed to an increase in net sales of 3.3% as compared to the first quarter of 2022.

Gross Profit.

Gross profit decreased to $279.2 million for the nine months ended September 30, 2022 from $294.7 million for the nine months ended September 30, 2021.

The gross profit margin in the nine months ended September 30, 2022 was 22.8%, as compared to 33.3% for the nine months ended September 30, 2021.

The nine months ended September 30, 2022 gross profit margin was lower mainly due to increased ethane feedstock costs and natural gas prices, lower third party ethylene sales prices and volumes and the larger buyer deficiency fee and Shortfall recognized during the nine months ended September 30, 2021, partially offset by higher sales prices and volumes for co-products and ethylene sold to Westlake compared to the nine months ended September 30, 2021.

Gross profit increased to $106.1 million in the first quarter of 2023 from $91.4 million in the first quarter of 2022.

The gross profit margin in the first quarter of 2023 was 34.5%, as compared to 25.2% for the first quarter of 2022.

The increase in gross profit and gross profit margin was primarily due to lower ethane feedstock costs and natural gas prices in the first quarter of 2023 compared to the first quarter of 2022, partially offset by lower ethylene and co-products sales prices.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased by $2.1 million, or 8.5%, to $26.8 million in the nine months ended September 30, 2022 as compared to $24.7 million in the nine months ended September 30, 2021.

The increase in the nine months ended September 30, 2022 was mainly attributable to a higher provision for doubtful accounts, partially offset by a decrease in service costs as compared to the nine months ended September 30, 2021.

Selling, general and administrative expenses decreased by $0.3 million, or 3.7%, to $7.9 million in the first quarter of 2023 as compared to $8.2 million in the first quarter of 2022.

The decrease in the first quarter of 2023 was mainly attributable to a decrease in the provision for doubtful accounts as compared to the first quarter of 2022.

Interest Expense.

Interest expense increased by $2.0 million to $8.7 million in the nine months ended September 30, 2022 from $6.7 million in the nine months ended September 30, 2021, due to a higher average interest rate on debt.

Interest expense of $7.3 million in the first quarter of 2023 increased from $2.2 million in the first quarter 2022 due to a higher average interest rate on debt owed to Westlake compared to the first quarter of 2022.

Other Income (Expense), net .

Other income, net of $0.8 million in the first quarter of 2023 primarily represents interest earned on the balance with Westlake under the Investment Management Agreement.

MLP Distributable Cash Flow.

MLP distributable cash flow increased by $0.8 million to $55.6 million in the nine months ended September 30, 2022 from $54.8 million in the nine months ended September 30, 2021.

The increase in the nine months ended September 30, 2022, as compared to the prior-year period, was primarily attributable to decreased turnaround reserves and maintenance expense, partially offset by lower earnings at OpCo.

EBITDA decreased by $8.0 million to $344.8 million in the nine months ended September 30, 2022 from $352.8 million in the nine months ended September 30, 2021.

The decrease, as compared to the prior-year period, was primarily due to higher ethane feedstock costs and natural gas prices for third party sales, lower ethylene sales prices and volumes to third parties, and the larger buyer deficiency fee and Shortfall recognized during the nine months ended September 30, 2021, partially offset by higher sales prices and volumes for co-products and ethylene sold to Westlake in the nine months ended September 30, 2022.

CASH FLOW DISCUSSION FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

MLP distributable cash flow decreased by $1.7 million to $17.6 million in the first quarter of 2023 from $19.3 million in the first quarter of 2022.

The decrease in the first quarter of 2023, as compared to the prior-year period, was primarily attributable to higher interest expense, partially offset by increased earnings at OpCo and decreased maintenance capital expenditures.

EBITDA increased by $11.1 million to $125.6 million in the first quarter of 2023 from $114.5 million in the first quarter of 2022.

The increase was primarily due to lower ethane feedstock costs and natural gas prices as well as higher ethylene sales volumes during the first quarter of 2023 as compared to the first quarter of 2022, partially offset by lower ethylene and co-products sales prices.

CASH FLOW DISCUSSION FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

Operating Activities

Operating activities provided cash of $341.2 million in the first nine months of 2022 compared to cash provided by operating activities of $386.6 million in the first nine months of 2021.

The $45.4 million decrease in cash flows from operating activities was mainly due to a decrease in cash provided by working capital during the nine months ended September 30, 2022 as compared to the prior-year period.

Changes in components of working capital, which we define for the purposes of this cash flow discussion as accounts receivable, net—Westlake, accounts receivable, net—third parties, inventories, prepaid expenses and other current assets less accounts payable—Westlake, accounts payable—third parties and accrued and other liabilities, provided cash of $2.3 million in the first nine months of 2022 as compared to $57.3 million of cash provided in the first nine months of 2021, resulting in an overall unfavorable change of $55.0 million.

The unfavorable change in working capital was mainly attributable to an unfavorable change in accounts payable and accrued and other liabilities due to the timing of payment of accruals related to the Petro 2 turnaround activities in 2021, as well as accounts receivable—third parties due to higher sales in the nine months ended September 30, 2022 since our Petro 2 turnaround in the second half of 2021.

These changes were partially offset by a favorable change in accounts receivable—Westlake due to the collection of the 2021 buyer deficiency fee and a portion of the 2021 Shortfall during the first nine months of 2022.

Operating activities provided cash of $144.9 million in the first three months of 2023 compared to cash provided by operating activities of $104.8 million in the first three months of 2022.

The $40.1 million increase in cash flows from operating activities was mainly due to an increase in cash provided by working capital during the three months ended March 31, 2023 as compared to the prior-year period.

Changes in components of working capital, which we define for the purposes of this cash flow discussion as accounts receivable, net—Westlake, accounts receivable, net—third parties, inventories, prepaid expenses and other current assets less accounts payable—Westlake, accounts payable—third parties and accrued and other liabilities, provided cash of $28.3 million in the first three months of 2023 as compared to $10.7 million of cash used in the first three months of 2022, resulting in an overall favorable change of $39.0 million.

The favorable change in working capital was mainly attributable to a favorable change in accounts receivable—third parties, accounts payable—third parties and accrued and other liabilities primarily due to the timing of payment of accruals and the impact on accounts receivable of the Petro 2 turnaround activities in 2021, which impacted the changes in working capital in the first three months of 2022.

These favorable changes were partially offset by an unfavorable change in net accounts receivable—Westlake primarily due to a smaller buyer deficiency fee collected in the first three months of 2023 as compared to the first three months of 2022.

Investing Activities

Net cash used for investing activities during the first nine months of 2022 was $74.5 million as compared to net cash used for investing activities of $111.4 million in the first nine months of 2021.

The $36.9 million decrease in net cash used for investing activities was mainly due to decreased net cash used under the Investment Management Agreement, partially offset by increased capital expenditures in the first nine months of 2022, as compared to the prior-year period.

Capital expenditures during the first nine months of 2022 and 2021 were primarily related to projects to improve production capacity or reduce costs, maintenance and safety and environmental projects at our facilities.

Net cash provided by investing activities in the first three months of 2023 was $0.2 million as compared to net cash used for investing activities of $25.3 million in the first three months of 2022.

The $25.5 million increase in net cash was mainly due to net cash provided by the Investment Management Agreement of $12.9 million in the first three months of 2023 compared to net cash used by the Investment Management Agreement of $5.0 million in the first three months of 2022.

Additionally, capital expenditures decreased in the first three months of 2023 as compared to the prior-year period.

Capital expenditures in the first three months of 2023 and 2022 were primarily related to projects to improve production capacity or reduce costs, maintenance and safety and environmental projects at our facilities.

Financing Activities

Net cash used for financing activities during the first nine months of 2022 was $264.3 million as compared to net cash used for financing activities of $273.7 million in the first nine months of 2021.

The outflows during the first nine months of 2022 were related to distributions of $214.5 million to Westlake and of $49.8 million to other unitholders by the Partnership.

The cash outflows during the first nine months of 2021 were related to distributions of $223.9 million to Westlake and of $49.8 million to other unitholders by the Partnership.

Net cash used for financing activities in the first three months of 2023 was $105.3 million as compared to net cash used for financing activities of $77.3 million in the first three months of 2022.

The outflows in the first three months of 2023 were related to distributions of $88.7 million to the noncontrolling interest retained in OpCo by Westlake and of $16.6 million to unitholders by the Partnership.

The cash outflows in the first three months of 2022 were related to distributions of $60.7 million to the noncontrolling interest retained in OpCo by Westlake and of $16.6 million to unitholders by the Partnership.

LIQUIDITY AND CAPITAL RESOURCES

1 unchanged sentence

Pursuant to the terms of the Equity Distribution Agreement, entered in October 2018 and amended in February 2020, among the Partnership and various investment banks, the Partnership may offer and sell the Partnership's common units from time to time to or through the investment banks, as the Partnership's sales agents or as principals, having an aggregate offering amount of up to $50.0 million (the "ATM Program").

The Partnership intends to use the net proceeds of sales of the common units, if any, for general partnership purposes, including the funding of potential drop-downs and other acquisitions.

No common units had been issued under the ATM Program as of September 30, 2022.

The Partnership intends to use the net proceeds of sales of the common units, if any, for general partnership purposes, which may include the funding of potential drop-downs and other acquisitions.

No common units had been issued under the ATM Program as of March 31, 2023.

Based on the terms of our cash distribution policy, we expect that we will distribute to our partners most of the excess cash generated by our operations.

9 unchanged sentences

Westlake's credit facility and various indentures do not prevent OpCo from making distributions to us.

On October 31, 2022, the board of directors of Westlake Chemical Partners GP LLC, our general partner, approved a quarterly distribution of $0.4714 per unit payable on November 28, 2022 to unitholders of record as of November 10, 2022, which equates to a total amount of approximately $16.6 million per quarter, or approximately $66.4 million per year in aggregate, based on the number of common units outstanding on September 30, 2022.

On May 2, 2023, the board of directors of Westlake Chemical Partners GP LLC, our general partner, approved a quarterly distribution of $0.4714 per unit payable on May 26, 2023 to unitholders of record as of May 12, 2023, which equates to a total amount of approximately $16.6 million per quarter, or approximately $66.4 million per year in aggregate, based on the number of common units outstanding on March 31, 2023.

We do not have a legal or contractual obligation to pay distributions on a quarterly basis or any other basis at our minimum quarterly distribution rate or any other rate.

1 unchanged sentence

Westlake has historically funded expansion capital expenditures related to Lake Charles Olefins and Calvert City Olefins.

Total capital expenditures for the nine months ended September 30, 2022 and 2021 were $45.5 million and $38.5 million, respectively.

No such funding was required by OpCo during the nine months ended September 30, 2022 and 2021.

No such funding was required by OpCo during the three months ended March 31, 2023 and 2022.

Total capital expenditures for the three months ended March 31, 2023 and 2022 were $12.7 million and $20.3 million, respectively.

We expect that Westlake will loan additional cash to OpCo to fund its expansion capital expenditures in the future, but Westlake is under no obligation to do so.

Cash and Cash Equivalents

As of September 30, 2022, our cash and cash equivalents totaled $19.5 million.

As of March 31, 2023, our cash and cash equivalents totaled $104.6 million.

In addition, we have cash invested under the Investment Management Agreement (as described below) and a revolving credit facility with Westlake available to supplement cash if needed, as described under "Indebtedness" below.

In August 2017, the Partnership, OpCo and Westlake executed the Investment Management Agreement that authorized Westlake to invest the Partnership's and OpCo's excess cash with Westlake for a term of up to a maximum of nine months.

In August 2017, the Partnership, OpCo and Westlake executed the Investment Management Agreement that authorizes Westlake to invest the Partnership's and OpCo's excess cash with Westlake for durations of up to a maximum of nine months.

Per the terms of the Investment Management Agreement, the Partnership earns a market return plus five basis points and Westlake provides daily availability of the invested cash to meet any liquidity needs of the Partnership or OpCo.

The Partnership had $135.9 million of cash invested under the Investment Management Agreement at September 30, 2022.

The Partnership had $52.1 million of cash invested under the Investment Management Agreement at March 31, 2023.

OpCo Revolver

In connection with the IPO, OpCo entered into a $600.0 million revolving credit facility with an affiliate of Westlake, as amended in June 2017, September 2018, March 2020 and July 2022 (the "OpCo Revolver") that may be used to fund growth projects and working capital needs.

In connection with the IPO, OpCo entered into a $600.0 million revolving credit facility with an affiliate of Westlake, as amended in June 2017, September 2018 and July 2022 (the "OpCo Revolver") that may be used to fund growth projects and working capital needs.

The OpCo Revolver is scheduled to mature on July 12, 2027.

On July 12, 2022, OpCo entered into the Second Amendment (the "OpCo Revolver Amendment") to the OpCo Revolver.

The OpCo Revolver Amendment, among other things, extended the maturity date to July 12, 2027 and provided for the replacement of LIBOR with the Secured Overnight Financing Rate, as administered by the Federal Reserve Bank of New York ("SOFR").

The OpCo Revolver Amendment, among other things, extended the maturity date to July 12, 2027 and provided for the replacement of the London Interbank Offered Rate ("LIBOR") with the Secured Overnight Financing Rate, as administered by the Federal Reserve Bank of New York ("SOFR").

Borrowings under the OpCo Revolver bear interest at a variable rate of either (a) SOFR plus the Applicable Margin plus a 0.10% credit spread adjustment or, if SOFR is no longer available, (b) the Alternate Base Rate plus the Applicable Margin minus 1.0%.

The Applicable Margin under the OpCo Revolver is 1.75%.

As of September 30, 2022, outstanding borrowings under the OpCo Revolver totaled $22.6 million and bore interest at SOFR plus the Applicable Margin and credit spread adjustment, which is accrued in arrears quarterly.

As of March 31, 2023, outstanding borrowings under the OpCo Revolver totaled $22.6 million and bore interest at SOFR plus the Applicable Margin and credit spread adjustment, which is accrued in arrears quarterly.

In 2015, we entered into a senior, unsecured revolving credit agreement with an affiliate of Westlake, as amended in August and November 2017, March 2020 and July 2022 (the "MLP Revolver").

1 unchanged sentence

On July 12, 2022, the Partnership entered into the Fourth Amendment (the "MLP Revolver Amendment") to the MLP Revolver.

The MLP Revolver Amendment, among other things, extended the maturity date to July 12, 2027 and provided for the replacement of LIBOR with the SOFR.

The MLP Revolver Amendment, among other things, extended the maturity date to July 12, 2027 and provided for the replacement of LIBOR with the SOFR as the reference rate.

Borrowings under the MLP Revolver bear interest at a variable rate of either (a) SOFR plus the Applicable Margin plus a 0.10% credit spread adjustment or, if SOFR is no longer available, (b) the Alternate Base Rate plus the Applicable Margin minus 1.0%.

The Applicable Margin under the MLP Revolver varies between 1.75% and 2.75%, depending on the Partnership's Consolidated Leverage Ratio.

3 unchanged sentences

The repayment of borrowings under the MLP Revolver is subject to acceleration upon the occurrence of an event of default.

As of September 30, 2022, outstanding borrowings under the MLP Revolver totaled $377.1 million and bore interest at SOFR plus the Applicable Margin and credit spread adjustment, which is accrued in arrears quarterly.

As of March 31, 2023, outstanding borrowings under the MLP Revolver totaled $377.1 million and bore interest at SOFR plus the Applicable Margin and credit spread adjustment, which is accrued in arrears quarterly.

We intend to use the MLP Revolver to purchase additional limited partnership interests in OpCo in the future, in the event OpCo desires to sell such additional interests to us, for other acquisitions and for general corporate purposes.

31 unchanged sentences

These statements are subject to a number of assumptions, risks and uncertainties, including those described under "Risk Factors" in the 2022 Form 10-K and the following:

• general economic and business conditions, including inflation, interest rates and recession;

• general economic and business conditions, including inflation, interest rates and possible recession;

• the cyclical nature of the chemical industry;

26 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis